Gratuity Valuation in CTC

Is gratuity Act 1972, applicable to foreign nationals working in India on work permit, as in our company which is a Project Management Consultants we have recurited and are in process of recuriting more, as per our project needs. Please let me know at earliest. You can mail me on thank you Regards Shrikant Kore

You can always approach LIC their group gratuity scheme is very good they provide it with a life cover and probably the clause of five years of continuous service is wived in case of accidental death, their contact no is 22846414 66599101 /2 /3, email / . Ms. Smita Mehta Admin Officer,
LIC Yogakshema, East Wing, Group Gratuity Cell, 1st Floor, Mumbai - 400021.

Thank for the useful information.

Dear Group members

Good to see a long healthy discussion. Though I agree that gratuity and mediclaim benefits could be formed part of CTC calculation, I do not quite agree with a few group members about how much to calculate cost of gratuity benefit in CTC. Approach used by most companies is as follows:

The cost of gratuity benefit will be some percentage of base salary, gross salary or total CTC. That percentage would be equal to the amount of contribution to be made to a funded scheme (e.g. to LIC) in respect of that employee. Therefore, the amount to be included as cost of gratuity benefit will be provided by LIC or any other insurance company that holds the funds, following the actuarial valuation of that particular gratuity scheme.

But the question stands about how to calculate cost of gratuity benefit, when the scheme is unfunded. In such a scenario, the company needs to approach an actuary for getting a funding valuation. The actuary will do an exercise called funding valuation to calculate the "notional" amount of contribution for each employee which can then be included as cost of gratuity benefit in employees' CTC

Hope the information is helpful

Yes, as per the Payment of Gratuity Act, 4.6 Years of service is considered as a elegible service,

Regards,

Vikas Shinde
9623013014